By Michelle Singletary
Sunday, July 16, 2006; F01

For nearly a decade, Ariel Capital Management LLC and Charles Schwab Corp. have studied the investing habits of African Americans who earn more than $50,000 a year.

The results of this year's survey concerned both companies.

The survey found that many African Americans are counting on getting a pension to live on in retirement. Or they expect to live off the equity in their home or income from investment properties. Some hope to start a small business, which will then help fund their retirement.

Increasingly missing from their retirement plans are investments in stocks or bonds.

"Black investors have focused on real estate and have not incorporated the stock market to the same degree as their white counterparts," said Lisa Toppin, director of human resources and diversity programs for Schwab.

The percentage of higher-income African Americans with stock investments is trending downward, from a high of 74 percent in 2002 to 64 percent this year. The proportion of higher-income whites with stock investments stands at 83 percent, virtually unchanged since the first year of the jointly sponsored survey, 1998.

Ariel and Schwab have a vested interest in pushing the merits of stock market investing. But that doesn't mean they aren't on to something.

None of us can afford to count on just one type of retirement pot -- be it a pension, real estate or the prospect of running a profitable small business.

African Americans have far less money saved in retirement accounts than whites. Their median amount saved is $59,000, vs. $93,000 for whites. They also contribute less to their retirement accounts monthly. (The median monthly contribution is $254 for black employees, compared with $306 for whites.)

Some black workers may have less saved because they are counting on getting a pension, the survey found.

In the latest investor survey, two-thirds of employed blacks -- compared with about half of employed whites -- work for organizations with a traditional pension plan. Far more black than white workers surveyed (44 percent vs. 25 percent) have jobs in government, which are more likely to offer pensions.

But there is no assurance that the benefits for a traditional pension plan won't be changed for the worse or taken away. Just look at the corporate world.

Among families with an employment-based plan, the percentage with only a traditional pension plan decreased from 40 percent in 1992 to 24 percent in 2004, according to the Employee Benefit Research Institute.

"All across America, corporate pension funds are being frozen and many government pension systems are underfunded," pointed out Mellody Hobson, president of Ariel, a black-owned institutional money management firm and mutual fund company based in Chicago. "It's a national crisis that will hit blacks especially hard because we've all bought into the promise."

The investor survey also found that three times as many African Americans as whites (29 percent vs. 10 percent) say they plan to start a business after they retire.

"People think a business is their brass ring so they don't need to save," Hobson said.

In addition, a higher percentage of African Americans than whites own real estate other than their home (42 percent vs. 33 percent), and of these, a greater share of African Americans (58 percent vs. 48 percent) say they expect these investments to help fund retirement.

Also notable in the survey was a finding that a higher percentage of blacks are taking care of adult children or aging parents.

According to the survey, 27 percent of African Americans, compared with 18 percent of whites, have an adult other than a spouse living in their home. African Americans who are concerned about saving for their children's education or those who are worried about caring for elderly parents are considerably less likely to be saving even $100 per month for retirement, the survey found.

It's understandable that you feel obligated to take care of Peaches or your Big Mama so you put off saving for your retirement. However, you've still got to save. Otherwise, the cycle continues -- meaning that when you retire, your relatives will have to take care of you, and then they can't save for their retirement. That circle of life has got to be straightened out.

"Caring for an elderly parent and aspiring to send a kid to college are all good things," Toppin said. "The challenge for our community is that many blacks have made it into the middle class but will very likely be retiring into the lower class, if we can retire at all."

The usefulness of this Ariel-Schwab investor survey is to again point out that we all need to have a diversified retirement portfolio. Because in the end, you'll want to have many options in case one of your pots boils down and becomes bone dry. If you've got only one pot, you can get burned.

· On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online athttp://www.npr.org.

· By mail: Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

· By e-mail:singletarym@washpost.com.

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